Uday S. Jagtap v. Chabildas Agarwal, 357 Itr 357.Thus,According To Him, This Petition Be Dismissed, Leaving It Open To Thepetitioner To Avail Of The Efficacious Alternative Remed

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2575 OF 2019 TLG India Pvt. Ltd. .. Petitioner v/s. Deputy Commissioner of Income Tax(TDS)-2(3) and Ors. .. Respondents Mr. J.D. Mistri, Senior Counsel a/w Ms. Fereshte Sethna, Mr. MrunalParekh, Mr. Mansukh Ravaria, Mr. Ameya Pant and Mr. Rishabh Dubeyi/b DMD Advocate for the petitioner Mr. P.C. Chhotaray for the respondents CORAM : M.S. SANKLECHA & NITIN JAMDAR, J.J. DATED : 18[th] NOVEMBER, 2019 P.C. 1.Parties were put to notice that on 15[th] October, 2019 that thisPetition is likely to be disposed of at the stage of admission. Today, atthe request of the parties, this Petition is being disposed of finally atthe stage of admission. 2.This petition under Article 226 of the Constitution of Indiachallenges three orders dated 9[th] September, 2019 passed by therespondent no.1 – Income Tax Officer under section 201(1) and201(1A) of the Income Tax Act, 1961 (the Act). The three impugned orders under Section 201(1) and 201(1A) relate toAssessment Years 2017-18, 2018-19 and 2019-20. The demandmade consequent to the above orders for the three assessment yearsaggregates to Rs. 94 crores. (approximately) 3.The identical/ common basis of the three impugned ordersadverse to the petitioner is (two fold) as under:- (a)the petitioner did not deduct the tax at source under theappropriate head of technical services under Section 194J ofthe Act (having made the deduction under Section 194C ofthe Act) on payment made to digital platforms such as M/s.Google India Pvt. Ltd. and others. This for advertisementplaced by the petitioner for its clients on their platforms; and; (b)the petitioner did not deduct tax from provision made forpayments to the various domestic suppliers. This resulted indis-allowance of expenses under Section 40(a)(ia) of the Acton account of not having suffered tax deduction at sourceunder Section 194J of the Act. Thus on the above two heads, the petitioner has been declaredas “assessee in default” and demand of tax has been made by therespondent no.1 – Income Tax Officer. 4.The basis of the challenge to three impugned orders dated9[th] September, 2019 is that they have been passed in the breach ofprinciples of natural justice. This in as much as the petitioner’ssubmission of not being liable to deduct tax under Section 194J ofthe Act in respect of Advertisements put on digital platforms has notbeen considered in its entirety, including what according to thepetitioner, are binding decisions of Courts and Income Tax AppellateTribunal (the Tribunal). Thus, making the impugned orders non-speaking orders and, therefore, in breach of principles of naturaljustice. Besides, the impugned orders are also being assailedon the ground that it has been passed in colourable exercise ofjurisdiction and/or in exercise of power for collectoral purposes as isevident, according to the petitioner, by the manner in which theimpugned orders were passed. It is submitted that the respondentno.1 - Income Tax Officer passed the impugned orders only with theobject of scuttling the Petitioner’s application for issue ‘nil’ tax deduction certificates issued under section 197 of the Act to beissued to the Petitioner’s customers on payments to be made to thepetitioner. This, it is submitted the respondent no.2 would havebeen on the facts of the petitioner’s case, obliged to grant in theabsence of the impugned orders which incorrectly makes a demandof tax on the petitioner. deduction certificates issued under section 197 of the Act to beissued to the Petitioner’s customers on payments to be made to thepetitioner. This, it is submitted the respondent no.2 would havebeen on the facts of the petitioner’s case, obliged to grant in theabsence of the impugned orders which incorrectly makes a demandof tax on the petitioner. 5.At the very outset, Mr. Chhotarey, the learned Counsel for therespondent objected to the petition being entertained as analternative remedy of an appeal under Section 246A of the Act fromthe three impugned orders to the Commissioner of Income Tax isavailable. In support, reliance was placed upon the decision of theSupreme Court in CIT Vs. Chabildas Agarwal, 357 ITR 357.Thus,according to him, this Petition be dismissed, leaving it open to thePetitioner to avail of the efficacious alternative remedy availableunder the Act. 6.It is a settled position that non interference on the ground ofalternative remedy is a self-imposed restriction, but in some cases,such as breach of principles of natural justice, the Court may entertain a petition. In fact, the decision cited by the respondent ofthe Supreme Court in Chabildas Agarwal (supra), the Court hadrecognized certain exceptions to the self-imposed rule of notentertaining a petition where alternative remdy is available and onesuch exception is where the order has been passed in breach ofprinciples of natural justice. Thus, in this case, we would restrictourselves only to examining the Petitioner’s grievance of breach ofprinciples of natural justice in passing the three impugned orders viz:non-speaking order and improper exercise of jurisdiction to achievecollateral purposes. Therefore, if on examination of the case on theabove touchstone alone, if we find merits in the Petitioner’ssubmission on even one of two, will we exercise jurisdiction, else willdismiss the petition on ground of alternate remedy. 7.The brief facts leading to this petition are as under. (a)The petitioner is an advertising agency, which enables itsclients to place/ display their advertisement on various media viz:print, T. V. etc. The Petitioner recover amount from its clients andmakes payment to media owners for the advertisement of its clients,on its media. At the time of making payment, the Petitioner’s clients deduct tax at source under Section 194C of the Act and thepetitioner again deducts tax at source under Section 194C of the Actwhile making payment to the media owners. (b)However, on 24[th] May, 2019 show-cause notices for theAssessment Year 2017-18, 2018-19 and 2019-20 were issued by therespondent no.1 to the petitioner. The above notices calleduponthe petitioner to show-cause as to why it should not be treated as anassessee in default under Section 201(1) and 201(1A) of the Actfor:- (i)failure to deduct tax on payments made to media ownersfor the services the media owners provided to the Petitioner under Section 194J of the Act; and (ii)failure to deduct tax on provisions for expenses, which it has itself disallowed under Section 40(a)(ia) of the Act. Thus, resulting in short payment of tax to the Revenue. (c)The petitioner responded to the above show-cause noticescontesting the premise therein, that there is a short deduction of tax.However, by three orders dated 31[st] May, 2019 passed by therespondent no.1 under Section 201(1) and 201A of the Act, theshow cause notices were confirmed. The petitioner was declared as (i)failure to deduct tax on payments made to media ownersfor the services the media owners provided to the Petitioner under Section 194J of the Act; and (ii)failure to deduct tax on provisions for expenses, which it has itself disallowed under Section 40(a)(ia) of the Act. Thus, resulting in short payment of tax to the Revenue. (c)The petitioner responded to the above show-cause noticescontesting the premise therein, that there is a short deduction of tax.However, by three orders dated 31[st] May, 2019 passed by therespondent no.1 under Section 201(1) and 201A of the Act, theshow cause notices were confirmed. The petitioner was declared as an assessee in default under Section 201(1) and 201(1A) of the Actfor the Assessment Years 2017-18, 2018-19 and 2019-20. (d)Being aggrieved by the three orders dated 31[st] May, 2019, thePetitioner challenged them by filing Writ Petition No.1788 of 2019 inthis Court on the ground of breach of principles of natural justice.This, in as much as the material relied upon in the orders dated 31[st]May, 2019 passed under Section 201(1) and 201(1A) of the Act,was not given to the petitioner at any the time before passing theorder dated 31[st] May, 2019. Thus, this Court by an order dated 29[th]July, 2019 passed in Writ Petition No. 1788 of 2019 set aside thethree orders dated 31[st] May, 2019 and restored the issue to therespondent no.1 - Income Tax Officer (TDS) raised in show-causenotices dated 24[th] May, 2019 for consideration afresh after sharingthe material on which the respondent no.1 seeks to rely upon forpassing an order under Section 201(1) and 201(1A) of the Act. Theorder dated 29[th] July, 2019 of this Court in Writ Petition No. 1788 of2019 further directed the petitioner to file its representation alongwith desired evidence with the respondent no.1 within a period of 6weeks from 29[th] July, 2019. This to enable the Respondent No.1 –Income Tax Officer to pass a final order on the show-cause notices dated 24[th] May, 2019. (e)At about the same time, the petitioner also instituted WritPetition No.1719 of 2019 challenging Certificates dated 4[th] June,2019 issued under Section 197 of the Act issued by Respondent No.2– the Dy. Commissioner of Income Tax. The challenge in WritPetition No. 1719 of 2019 was to the partial rejection of theapplication for nil tax deduction at source to be done by itscustomers being rejected and instead directing the deduction at therate of 1% in case of payments being made to the petitioner underSection 194H and 194C of the Act and 1.5% in respect of 194(IB)and 194J of the Act. The aforesaid decision was primarily arrived atby the respondent no.2 placing reliance on the tax orders dated 31[st]May, 2019 passed under Section 201(1) and 201A of the Act relatingto Assessment Years 2017-18, 2018-19 and 2019-20 by RespondentNo.1 – Income Tax Officer. This Court by an order dated 29[th] July,2019 in Writ Petition No.l719 of 2019 set aside the order dated 4[th]June, 2019 as it found that the same was influenced by the orderdated 31[st] May, 2019 of respondent no.1 under Sections 201(1) and201A of the Act to deny Nil rate of tax deduction on amountsreceivable by the petitioner from its customers. However, as the order dated 31[st] May, 2019 had been set aside in Writ PetitionNo.1788 of 2019, the respondent no.2 – Deputy Commissioner ofIncome Tax was directed to undertake a fresh exercise on thepetitioner’s application under Section 197 of the Act. Further, theabove order i.e. on the Petitioner’s application under Section 197 ofthe Act, should be passed within 4 weeks from the date of orderdated 29[th] July, 2019 in Writ Petition No.1719 of 2019. (f)It would thus be noticed from the above facts that this Court byin order dated 29[th] July, 2019 in Writ Petition No. 1719 of 2019had directed the parties to file its representation in respect ofproceedings proceedings under Sections 201(1) and 201(1A) of theAct by 9[th] September, 2019 to enable the Respondent No.1 – IncomeTax Officer to pass an order thereon. So far as the proceedingsrelating to Writ Petition No. 1719 of 2019 in respect of order dated4[th] July 2019 under Section 197 of the Act is concerned, this Court byorder dated 29[th] July, 2019 granted to Respondent No.2 – DeputyCommissioner of Income Tax four weeks from that date to pass anorder on application under Section 197 of the Act. Thus, from thetime lines provided in the two orders dated 29[th] July, 2019, it is clearthat the two proceedings were not linked. (g)Thereafter, the respondent No.2, took out a Notice of Motion(L) No.451 of 2019 in Writ Petition No.1719 of 2019 seekingextension of 4 weeks time granted by order dated 29[th] July, 2019 toissue the certificates under Section 197 of the Act. In its affidavit insupport, Respondent No.2 – Deputy Commissioner of Income Tax hadstated that the time to issue the certificate under Section 197 beextended till a fresh order under Section 201(1) & 201(1A) of theAct is passed consequent to the order dated 29[th] July, 2019 in WritPetition No. 1788 of 2019. (h)This Court by order dated 3[rd] September, 2019 in the aboveNotice of Motion (L) No. 451 of 2019 extended the time to issueorders / certificates under Section 197 of the Act upto 9[th] September2019. It further recorded its refusal to link passing of the fresh orderunder Section 197 of the Act with the orders to be passed in case ofassessment for Assessment Year 2017-18 which is an attempt of theRevenue (this in the context of the affidavit filed by the Respondentno.2 – Deputy Commissioner of Income Tax, which is in effect theorders passed under Section 201 and 201A of the Act). (i)On 9[th] September, 2019 the petitioner filed its detailedrepresentation in respect of present proceedings under Section 201(1) and 201(1A) of the Act with the respondent no.1 – IncomeTax Officer pointing out the reason why, according to the petitionerit is not an assessee in default. In the said representation, it was thepetitioner’s contention that the payments made by it to TV, print,electronic and other medias for displaying of advertisement of thepetitioner’s clients were not in the nature of fees for technicalservices. Therefore, the payments made by the petitioner to themedia owners cannot be subjected to deduction of tax at sourceunder section 194J of the Act. In particular, the principal submissionsof the petitioner that it was not a assessee in default were as under:- (i)In view of CBDT Circular No. 715/1995 dated 8[th] August,1995, which inter alia provides that the requirement of taxdeduction at source would apply only when a client makes apayment to advertising agency. It would not apply when theadvertising agency in turn makes payment to the media owneri.e. print and electronic media. Thus, no requirement to deducttax at source. (ii)Without prejudice to the above, as a matter of abundantcaution, the petitioner had deducted tax at source underSection 194C of the Act while making payment to the media (i)In view of CBDT Circular No. 715/1995 dated 8[th] August,1995, which inter alia provides that the requirement of taxdeduction at source would apply only when a client makes apayment to advertising agency. It would not apply when theadvertising agency in turn makes payment to the media owneri.e. print and electronic media. Thus, no requirement to deducttax at source. (ii)Without prejudice to the above, as a matter of abundantcaution, the petitioner had deducted tax at source underSection 194C of the Act while making payment to the media owners. This as the payments made for advertising was forcarrying out any work as it stands covered by definition ofwork in Section 194C of the Act. The service provided by themedia owners is not in the nature of technical services but inthe nature of work. Thus, 194C of the Act being morespecific, it would be would be appropriately covered by theCBDT Circular No.720/1995 dated 30[th] August, 1995. Further,reliance was also placed upon the decision of this Court inCIT v/s. UTV Entertainment (2017) 88 Taxmann.Com 214,wherein it was held that Section 194C of the Act is morespecific and is to be applied in preference to Section 194J ofthe Act. (iii)Section 194J of the Act would have no application to thepresent fact as the sine-qua-non for rendering of technicalservices is human intervention in enabling the petitioner(service receiver) to utilize the service. This can only beestablished by leading of technical evidence in support of thesame. In support, reliance was placed upon the decision of theSupreme Court in the case of Commissioner of Income Tax Vs.Bharati Cellular Ltd. 330 ITR 239wherein it has been held that in the absence of an expert evidence in support of theRevenue’s stand it is impossible to show that humanintervention was necessary in providing the service, beforeSection 194J of the Act could be applied. In fact consequentto the above, the CBDT had issued Instructions bearingNo.5/11 dated 30[th] November, 2011. This was relied upon inthe representation to contend that the Assessing Officer has totake the opinion of technical expert and bring it on record toestablish that human intervention was necessary so as toprovide the service, for tax to be deducted under Section 194Jof the Act. No such exercise was done by the Revenue.(iv)In any event, the petitioner did place reliance upon anopinion of a technical expert viz. one Mr. Kamleshwar Bhatt ofM/s. I2K2 Network Ltd. to support its contention that theonline advertisement as availed by the Petitioner does notrequire any human intervention or assistance. Thus, it is not atechnical service. Therefore, no deduction of tax under Section194J of the Act is called for. (v)The petitioner has placed reliance upon the decision ofthe Tribunal in the case of ITO Vs. Right Florist Pvt. Ltd.the Tribunal in the case of ITO Vs. Right Florist Pvt. Ltd. (2013) 32 taxmann.com 99 wherein identical nature ofservice was held to not fall under Section 9(1)(vii) of the Actas a technical services. This as on examination of identicalservices of online advertisement on a search engine is a serviceand not requiring human intervention. Therefore, is not inthe nature of technical services. It is pertinent to note that thePetitioner pointed out that in the earlier order dated 31[st] May,1999, (which was set aside by this Court’s order dated 29[th]July, 2019), this decision was disregarded on the ground thatpayment was made to non-resident, failing to appreciate that ithad in terms, dealt with the issue of technical services and onidentical facts found that services are not in the nature oftechnical services. (2013) 32 taxmann.com 99 wherein identical nature ofservice was held to not fall under Section 9(1)(vii) of the Actas a technical services. This as on examination of identicalservices of online advertisement on a search engine is a serviceand not requiring human intervention. Therefore, is not inthe nature of technical services. It is pertinent to note that thePetitioner pointed out that in the earlier order dated 31[st] May,1999, (which was set aside by this Court’s order dated 29[th]July, 2019), this decision was disregarded on the ground thatpayment was made to non-resident, failing to appreciate that ithad in terms, dealt with the issue of technical services and onidentical facts found that services are not in the nature oftechnical services. (vi)The Petitioner placed reliance upon the certificateprovided M/s. Google India Pvt. Ltd., (which forms the bulkof the payment) that it had, in fact, paid the taxes on thepayment received by them, thus in terms of proviso to section201(1) of the Act, the petitioner could not be considered anassessee in default. In support, reliance is also placed uponthe decision of the Supreme Court in Hindustan Coca Cola Beverage (P) Ltde., v/s. CIT 293 ITR 226 and of the Tribunal inthe case of Vodafone Essar Ltd.v/s. ACIT 2011 (9) ITR 182,wherein it has been held that where the appropriate taxes havebeen paid by the payee / deductees, then the taxes cannot berecovered again from the deductor / payer such as thePetitioner; and (vii) So far as disallowance under Section 40(a)(ia) of the Actis concerned, the Petitioner pointed out that this disallowancewas of a mere provision. There is no requirement to deducttax in respect of provision made, which is being reversed in thenext year. This would amount to deducting tax towards theliability of another person, even when he does notacknowledge the same. Reliance was placed upon a decisionof Delhi High Court in DIT v/s. Eriession (ITA 106/02) andGujarat High Court in PCIT v/s. Sangli Infrastructure Ltd.(2018) 96 Taxmann.com 370. (ix)The above submissions were filed on 9[th] September,2019. No query and/or clarification was sought by the Revenuebut immediately on receipt of the representation, therespondent no.1 passed the three impugned orders all dated 9[th] September, 2019 holding that the petitioner is an assesseein default under Section 201(1) and 201(1A) of the Act for theAssessment Years 2017-18, 2018-19 and 2019-20. This forinter alia having failed to deduct tax at source on paymentsmade to M/s. Google India Pvt. Ltd. and other like suppliersunder Section 194J of the Act. 8.On examination of the three impugned orders which areidentical in nature, we find that it does not consider much less dealwith the following contentions of the petitioner :- On examination of the three impugned orders which are (i)the petitioner’s contention of Supreme Court decision inBharati Cellular Ltd. (supra) and the consequent CBDT CircularNo.5/11 on which the petitioner placed reliance was not evenadverted to much less considered. The aforesaid bindingdecision was ignored without any reason. So also, thepetitioner’s evidence of an expert was not considered in theimpugned order. In fact, it gives no reason why it seeks toignore the same or why it does not seem it necessary to obtainan evidence of technical expert with regard to humanintervention before holding that Section 194J of the Act is applicable as technical service is provided by the mediaowners. (ii)Section 194C of the Act is the applicable provision, as itis more specific then 194J of the Act. This submission dulysupported by CBDT Circular No.720 of 1005 and the decisionof this Court in UTV Electronics (supra) holding that betweenSections 194C and 194J of the Act, it is Section 194C of theAct, which is more specific and the same would apply. applicable as technical service is provided by the mediaowners. (ii)Section 194C of the Act is the applicable provision, as itis more specific then 194J of the Act. This submission dulysupported by CBDT Circular No.720 of 1005 and the decisionof this Court in UTV Electronics (supra) holding that betweenSections 194C and 194J of the Act, it is Section 194C of theAct, which is more specific and the same would apply. (iii)The decision of the Tribunal in the case of Right FloristsPvt. Ltd. (supra), that it dealt with on identical fact situation inthe context of examining the nature of services rendered – notbeing technical was ignored. This on the ground that theservice provider was with Non-Resident. However, failing todeal with the specific submission made that the above decisionon examining an identical situation had held that the service isnot a technical service. Thus, on the face of it, the impugned orders are in breach ofnatural justice being non-speaking orders and would warrantinterference in writ jurisdiction. It is a clear case of a flaw in the decision making process. 9.It is clear from the impugned orders that the aforesaidsubmissions of the petitioner were not considered by the respondentno.1 – Income Tax Officer while passing the three impugned orders.Mr. Chhotaray seeks to rely upon the affidavit-in-reply filed by therespondent no.1 to support the impugned orders by seeking to meetthe petitioner’s objections. This certainly cannot be permitted. Asheld by the Supreme Court in Mohinder Singh Gill Vs. ElectionCommissioner, AIR 1978 SC 851, the order must speak for itself andcannot be improved upon by an affidavit. Moreover, it is pertinentto note that the impugned order was passed by one Mr. D. P. Marui.e. a person different from the person who has filed an affidavit-in-reply i.e. Mr. Verma on behalf of respondent no.1. Thus, the viewsin this affidavit do not reflect the views of the officer who passed thethree impugned orders. In any event, in law it cannot be used /relied upon to improve upon the three impugned orders dated 9[th]September, 2011 passed under Sections 201 (1) and 201A of the Act. 10.From the above, it is evident that the impugned orders are non-speaking orders in as much as admittedly it has not consideredthe petitioner’s submissions which go to the root of the matter. Theobject of natural justice is to ensure that parties views/ objections aretaken on board and considered before it is rejected. At times, thereply filed by the respondent may require certain clarifications. This,clarification the authority must seek before taking any decisionadverse to the party. The requirement of natural justice is only toensure that the party’s stand is effectively dealt with by theauthorities under the Act. Mere ritualistic giving of hearing andreproducing the submissions made without understanding the party’scase would not satisfy the test of natural justice. In this case, theAdjudicating Authority was of the view that evidence of M/s. Google(I) (P) Ltd., that it had paid the taxes, has not been filed in theappropriate form and manner. In such a case, the authority shouldask the party concerned to submit the same in proper form andmanner. It is only thereafter that, a view can be taken on the same.The Authorities of the State are not expected to take advantage of acitizen / assessee’s ignorance. So also the technical evidence led isignored without pointing out why it is not acceptable, by crossexamining the technical expert or by leading contrary evidence. It is not open to the Authority to ignore the evidence / submissions madeby the party as it is not the object of quasi judicial authority toconfirm their prima facie view, but the object is to find the correctfacts and thereafter apply the law to those facts and take a decisionin terms thereof. It must also be borne in mind that the petitionerhad filed its reply as directed by the Court on 9[th] September, 2019being the last date to file a representation. The respondent disposedof the same on 9[th] September, 2019. This in the absence of anystatutory obligation or judicial directions to dispose of the show-cause notice by 9[th] September, 2019 itself. The Authority could taketime, consider the submissions and call the party for further hearingbefore passing the impugned order. 11.It appears that the undue haste in passing the impugned ordersdated 9[th] September, 2019 on the part of the respondent no.1 wasonly with the objective of using these orders declaring the Petitioneris an assessee in default, for the purposes of depriving the petitionerof its right to obtain certificates under Section 197 of the Act at Nilrate of tax deduction to be made by its customers. This is evidentfrom the fact that on 29[th] July, 2019 when the Court set aside the earlier three orders dated 31[st] May, 2019 issued under Section201(1) and 201(1A) of the Act in Writ Petition No.1788 of 2018, theCourt had directed the petitioner to make a representation alongwith supportive material before the respondent no.1 – Income TaxOfficer (TDS) within a period of 6 weeks from that date whichexpires i.e. on or before 9[th] September, 2019. On the same date, i.e.on 29[th] July, 2019 this Court had in another Writ Petition No. 1719 of2019 had set aside certificates dated 4[th] June, 2019 issued by theDeputy Commissioner of Income Tax – respondent no.2 underSection 197 of the Act. This inter alia on the ground that they werebased upon the orders dated 31[st] May, 2019 issued under Section 201and 201(1A) of the Act. The Court held that the orders dated 31[st]May, 2019 are set aside and the respondent no.1 will re-examine theissue and determine the rate of income tax to be deducted by thepetitioner’s customers while making payment to the petitioner. Theaforesaid exercise had to be done within 4 weeks from 29[th] July,2019. 12.The respondent Revenue thereafter took out a Notice of Motionbearing No. (L) 451/2019 in Writ Petition No.1719 of 2019 seeking extension of time for issuing lower tax deduction certificate underSection 197 of the Act. In the affidavit in support filed by theRespondent No.2, the Dy. Commissioner of Income Tax, has clearlystated that demands are likely to be raised on passing of fresh ordersunder Section 201(1) and (1A) of the Act,which will impact thecertificate to be issued under Section 197 of the Act. Therefore, timemay be granted to issue certificates under Section 197 of the Actafter orders are passed in Section 201(1) and 201(1A) of the Act.This Court by an order dated 3[rd] September, 2019 extended the timeto issue the certificates under Section 197 of the Act upto 9[th]September, 2019. Therefore, it did not accept the Revenue’ssubmission to extend the time till orders are passed under Section201(1) and 201(1A) of the Act. 13.It is in the aforesaid circumstances, we note that when thepetitioner filed representation on 9[th] September, 2019 in respect ofthe proceedings under Section 201 and 201(1A) of the Act, therespondent no.1 – the Income Tax Officer (TDS) in undue hastepassed an order determining huge sums payable by the petitioner forthe Assessment Years 2017-18, 2018-19 and 2019-20 for failure to 13.It is in the aforesaid circumstances, we note that when thepetitioner filed representation on 9[th] September, 2019 in respect ofthe proceedings under Section 201 and 201(1A) of the Act, therespondent no.1 – the Income Tax Officer (TDS) in undue hastepassed an order determining huge sums payable by the petitioner forthe Assessment Years 2017-18, 2018-19 and 2019-20 for failure to appropriately deduct tax. This entire exercise was done in unduehaste as the respondent Revenue i.e. Respondent No.2 – the Dy.Commissioner of Income Tax was obliged to issue the tax deductioncertificate under Section 197 of the Act before 9[th] September, 2019.It is only on determination of the petitioner’s tax liability for theAssessment Years 2017-18, 2018-19 and 2019-20, could therespondent reduce the amount of tax to be deducted by thepetitioner’s customers while making payment to them. Thus, itseems likely that the entire exercise of passing the three impugnedorders under Section 201 and 201(1A) of the Act was either acolourable exercise of power only with a view to ensure that no niltax deduction certificate is issued under Section 197 of the Act or itcould be on the basis of genuine misunderstanding of the respondentno.1 that he is required to pass an order before the certificate isissued under Section 197 of the Act. It was this undue haste thatresulted in the Respondent No.1- the Income Tax Officer not dealingwith the Petitioner’s submissions in its entirety. Even otherwise, weare also unable to comprehend why the undue haste on the part ofthe respondent No.1 in passing the order under Section 201 and201(1A) of the Act. This for the reason that even if the tax deduction certificates were issued under Section 197 of the Actbefore an order was passed under Section 201(1) and 201(1A) of theAct, it was always open to the Revenue to cancel the earlier taxdeduction certificate issued under Section 197 of the Act and issuefresh tax deduction certificates, in view of the orders under Section201(1) and (1A) of the Act. Thus, the entire proceedings leading tothe impugned orders dated 9[th] September, 2019 are vitiated forbreach of natural justice and needs to be set aside. 14.There is one more issue in the impugned orders namely thedis-allowance made under Section 40(a)(ia) of the Act i.e. therequirement to deduct tax at the time of credit in the books ofaccounts i.e. even before the payment is made, is not suffering frombreach of natural justice not having considered the Petitioner’ssubmissions. However, as the impugned orders were passed inundue haste, in the absence of sufficient consideration being given toPetitioner’s submission. We see no reason to split the impugnedorders in two parts so as to relegate the petitioner to file an appeal inrespect of dis-allowance under Section 40(a)(ia) of the Act and onthe other issues entertain the Petition. In fact, this Court in its order dated 29[th] July, 2019 passed in Writ Petition No.1788 of 2019seeking to setting aside the orders dated 31[st] May, 2019 passed underSection 201 and 201(1A) of the Act for Assessment Years 2017-18,2018-19 and 2019-20, had take a view that in such cases, splitting ofan order may not be advisable. 15.In the above view, we set aside the three impugned ordersdated 9[th] September, 2019 and restore it to the respondent no.1(Income Tax Officer) for fresh disposal of the show cause noticedated 24[th] May, 2019. This after following the principles of naturaljustice i.e. due consideration of the Petitioner’s submission by aspeaking order. 16.The petition is allowed in the above terms. (NITIN JAMDAR, J.) (M.S. SANKLECHA, J.)